HCL Tech to share Q4 results, declare dividend on April 20. Results timing, earnings preview & more

HCL Technologies is all set to share its March quarter results on Thursday post market hours. The board of IT major will consider and declare final dividend for FY23, if any. Analysts largely expects the IT major to report a single digit rise in net profit for the quarter on a double-digit jump in net sales. The sequential numbers, however, be low partly due to its software business seasonality. Analysts said HCL Tech may guide for a 5-7 per cent FY24 revenue growth in constant currency terms and 18-20 per cent FY24 Ebit margins.

Deal wins, deal pipeline and pace of deal closures, any deferment of projects amid macro uncertainties, growth outlook for ER&D and software businesses and demand outlook for major verticals like BFSI, manufacturing, technology, retail and healthcare will be keenly followed.

Emkay Global expects profit for this IT firm to rise 9.2 per cent YoY to Rs 3,923 crore compared with Rs 3,594 crore in the year-ago quarter. Revenue is seen climbing 18.8 per cent YoY to Rs 26,853 crore from Rs 22,597 crore YoY.

"We are building in 0.7 per cent QoQ dollar revenue growth after factoring in 120 basis points crosscurrency tailwinds. Services business is expected to drive growth on account of deal ramp-ups, while software revenue is expected to report a sharp decline sequentially due to seasonality. We expect EBIT margin to decline by 120bps sequentially on account of business mix change (sharp decline in software revenue)," Emkay said.

ICICI Securities said the revenue is expected to be within guided range of 13.5-14 per cent for FY23. HCLT is seeing softness in technology, retail and CPG verticals, which the company had also called out earlier. That said, the IT major does not have material exposure to US regional banks. HCL Tech, ICICI Securities said, is also seeing delay in conversion of pipeline to TCV.

Plus, there is higher focus on large cost take-out deals, it said, as the brokerage expects Q4FY23 margin within guidance range of 18-18.5 per cent. Fresher hiring is expected to progress as planned during start of the year.

HCL may "start with annual revenue growth guidance of 5-7 per cent in CC terms for FY24E. On EBIT margin guidance, we expect it to be 18-19 per cent for FY24E after clocking 18.4 per cent in FY23E. For Q4FY23E, we expect HCL results to be the weakest in our coverage universe in terms of CC QoQ growth at just -1.9 per cent due to weak seasonality at product & platform business," ICICI Securities said.

Motilal Oswal said HCL Tech is one of the key beneficiaries of Cloud adoption at scale, given its expertise in IMS. That said, the IT firm's Q4 results are expected to impacted by software business seasonality.

HCL Tech is expected to report a 20.3 per cent YoY (1.8 per cent QoQ) rise in revenue at Rs 27,180 crore. Adjusted profit is seen rising 9.6 per cent YoY to Rs 3,940 crore. Sequential dollar revenue growth is seen at 1.5 per cent while CC revenue growth is seen at 0.5 per cent.

"We expect HCL Tech to report muted growth due to a seasonal drag in HCL Software," the brokerage said, adding that growth in IT Services to remain strong. Margins are seen decline 150 bps QoQ for HCL Tech, largely due to a seasonal decline in HCL Software.

Following its quarterly results, the senior management of HCL Technologies will conduct audio conference call at 7 p.m. (IST) for 60 minutes to discuss the results, followed by the detailed question-answer session.

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